This article originally appeared on the Center for Effective Philanthropy blog.
A growing group of nonprofit leaders and advocates for more effective philanthropy — joined by a small cadre of grantmakers — have been calling for multiyear general operating support (GOS) to be the norm for funding, rather than the exception. Our research at the Building Movement Project shows the importance of GOS for nonprofits led by people of color, especially during the COVID-19 pandemic and uprisings that have focused the sector on anti-Black racism and the need to address issues of racial justice.
Despite the increased conversation about multiyear GOS, CEP’s report, New Attitudes, Old Practices: The Provision of Multiyear General Operating Support, shows once again that talk does not mean action. In the past decade, just over one-tenth of grants (12 percent) in CEP’s Grantee Perception Report dataset were both multiyear and GOS — and of the foundations CEP surveyed for the report, just a fraction (11 percent) of those funders that do make these grants say they do so to a majority of their grantees.
The report points out that the “trust and familiarity the foundation has with the grantee” is the basis for choosing the small portion of grantees that will receive multiyear GOS. To state the obvious, organizations led by people of color are probably not getting much multiyear GOS. Research and opinion pieces about “philanthropic redlining” in the past year reveal the barriers people of color face in obtaining philanthropic dollars at all, no less the scant multiyear GOS that is available.
At the Building Movement Project, we have surveyed thousands of nonprofit staff about racial inequities in the nonprofit sector for our Race to Lead initiative. The data shows that many challenges are widely shared across race, such as frustrations about workload, not having enough staff to do fundraising and development, and boards that too rarely engage in fundraising.
But leaders of color face all of these challenges plus added barriers. We found that executive directors of color were more likely than white executive directors to report that they were challenged by not having relationships with funders. We also found that executive directors of color were less likely to report that their funding is comparable to peer organizations doing similar work.
In our most recent report, On the Frontlines, which examines how nonprofit leaders of color are faring in the wake of the pandemic, the usual concerns about not being treated fairly by funders took on new urgency. We surveyed more than 400 nonprofit leaders of color this past spring, when organizations were still adapting to COVID-19, and the funding concerns were widespread. We found that Black leaders were more likely than Asian and Latinx leaders to report that their organizations had already experienced decreases in grant revenue.
As our report notes, Black-led organizations are struggling to meet two urgent crises right now: COVID-19 and anti-Black racism. When asked what their organization needed to survive this period of financial uncertainty, one Black leader we interviewed said, “We need money, and trust … We need not just funding for this six-month period of crisis, not just for a year, but multiple years of funding so we are enabled and have the capacity and resources to create transformation.”
Another Asian-American leader wrote, “Right now, I am more worried about our 2021/2022 budget. I don’t know how those years will be impacted but I want to get ahead and make sure we have secure and stable funding. This is the time for funders to make general operating grants and make them at least [through] 2022.”
As a leader of a grant-seeking organization myself, I can attest that several foundations have responded to the current crisis by offering to convert existing grants to general support, and by extending timelines. This flexibility is hugely helpful in the midst of the current crisis. For us, it was GOS that made it possible for our organization to do a study on the impact of COVID-19 on leaders of color, something we could not, of course, have planned for or anticipated.
I also know that when many of my fellow nonprofit leaders secure multiyear GOS grants, that funding helps to fill the financial holes created by restrictive grants that don’t cover the full costs of their organization’s actual work. While flexible funding saves organizations, it also gives foundations that refuse to provide multiyear GOS a false sense that the way they fund is working.
The big question that CEP’s research raises is: what will it take to move from talk to action? Maybe direct pressure from one funder to the next will result in the lasting increase in the number of multiyear GOS grants that we nonprofit leaders — especially leaders of color — so desperately need to survive.
Sean Thomas-Breitfeld is co-director of the Building Movement Project. Follow BMP on Twitter at @BldingMovement.